Bitcoin and volatility

cdixon

4 years ago

The beauty of software platforms is that you can solve almost any problem by writing more software.

For example, one of the most common criticisms of Bitcoin is that it is too volatile and speculative to be used as a payment system. Merchants want the stability of government-backed currencies. Buyers don’t want their Bitcoin exposure to fluctuate whenever they transact in Bitcoin.

Coinbase has solved this problem. Merchants can instantly convert any Bitcoin they receive into dollars. Buyers can automatically replenish any Bitcoin they spend. Transactions that use Coinbase this way create zero net Bitcoin exposure for either party. Volatility is no longer an issue.